The British Pound Is Starting to Resemble Emerging-Market Currencies
- Pound’s correlation with EM currencies is the most since 2016
- British currency falls to record low against EM gauge
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The turbulence in the British pound is increasingly resembling gyrations typically seen in emerging markets.
While the U.K. currency is heading for its biggest monthly slump since October 2016 amid growing chances of a no-deal Brexit, its 90-day correlation with a gauge of developing-nation currencies has risen to the most in almost three years. Given the U.S. dollar’s continued strength and the shared vulnerability to political risks of the U.K. and developing nations, this relationship may get more attention in the weeks to come.